By Jared Blikre

The tech trade isn’t just leading the market. It’s swallowing the ETF tape.

Since the S&P 500’s March 30 low, technology ETFs have dominated sector flows, leaving most other sectors fighting over scraps. For investors trying to diversify after another tech-led surge, the first challenge is simple: making sure their “diversifier” is not just tech in another wrapper.

That’s harder than it sounds.

Strategas ETF strategist Todd Sohn — the ETF whisperer — flagged that tech has pulled in the bulk of sector ETF flows since the market’s spring low, while cumulative flows to all other sectors were slightly negative as of the firm’s latest tally.

Cumulative sector ETF flows since March 30 S&P 500 low. Strategas ETF Research, Yahoo Finance

The crowding also shows up under the hood.

Tech now makes up more than half of the Invesco Nasdaq 100 ETF (QQQM) and iShares Russell 1000 Growth ETF (IWF), which is not exactly shocking.

But Sohn’s work also shows plenty of tech hiding in factor funds, which group stocks by traits like momentum, value, quality, or low volatility rather than by sector.

The surprise is the iShares MSCI USA Value Factor ETF (VLUE), which is nearly half tech — a strange look for a fund built around value stocks. The iShares MSCI USA Momentum Factor ETF (MTUM) is nearly half tech too, while the iShares MSCI USA Quality Factor ETF (QUAL) is north of one-third. Meanwhile, the iShares MSCI Emerging Markets ETF (EEM) is over 40% tech.

In other words, investors may own more technology exposure than they think — even when they are not buying a tech ETF.

ETF options beyond tech

The alternatives are not exactly glamorous.